Tajikistan: Chinese company gets gold mine in return for power plant

TBEA contributed most of the $349 million it cost to build a power plant in Dushanbe.

Apr 11, 2018

A company from China has reportedly been granted a license to operate a gold mine in Tajikistan in exchange for building a power plant free of charge in the country’s capital.

Asia-Plus newspaper reported on April 11, citing an unnamed official with the State Geology Department, that Xinjiang-based TBEA has received the concession to develop the Upper Kumarg mine in the Sughd region in northern Tajikistan. The company was previously given the concession for the Eastern Duoba mine.

The newspaper’s source said that the mining license was granted as remuneration for the funds TBEA spent on building the 400-megawatt Dushanbe TETs-2 power plant. Work on that thermal power plant was completed in December 2016 at a total cost of $349 million. Of that overall budget, around $17.4 million were provided by the Tajik government.

The arrangement described to Asia-Plus is that TBEA will work on the gold deposits as long as it takes to recoup its outlay.

“Afterward, the company plans to reach new deals on the management of these mines, but on different terms,” Asia-Plus said in its report, citing its unnamed source.

The quid quo pro deal may elicit some anxiety about how Tajikistan intends ultimately to deal with the rest of its considerable debts before Chinese creditors. The country’s external debt at the start of the year stood at $2.9 billion. Of that total, $1.2 billion is owed to the state-run Export-Import Bank of China, or Exim Bank.

Much of the money borrowed from China has gone toward building basic infrastructure like roads and tunnels, but some of the spending appears less than obviously indispensable.

When President Emomali Rahmon visited Beijing in September, he returned bearing $310 million in grants and loans. The bulk of that sum — around $230 million — is being spent on a new parliament complex in central Dushanbe.

In 2011, Tajikistan’s parliament voted to ratify an agreement to cede around 1,000 square kilometers of land to China in exchange for the waiving of a large outstanding debt running into the hundreds of millions of dollars.

The gold mining concession has now proven another way in which to pay off liabilities. A billion or so dollars can buy a lot more than that, however.